If you’re feeling the pinch of the nursing shortage, the challenging hiring market, and the fierce competition in the healthcare industry, you’re definitely not alone. Retention and recruiting are tough these days. That’s why health and dental employees now expect a comprehensive benefits package, not just a solid paycheck. By investing in 401(k) benefits that align with what healthcare employees are looking for, practices can position themselves to support both long-term financial goals and a positive workplace culture.
Why 401(k) Benefits Matter to Healthcare Employees
Healthcare professionals share many of the same financial pressures as professionals in other industries, only magnified. Student loan debt, burnout, and concerns about long-term career sustainability loom large. These workers have enough to worry about, and squirreling away their hard-earned income for retirement becomes yet another burden.
That’s not all. 93% of employees consider retirement benefits so important, they might not even take a job offer that doesn’t include it. And if you thought this only mattered to older workers, think again. You might be surprised how savvy your team is, and investing in your employees’ retirement can show that you’ll support long-term growth.
Can 401(k) Be a Shortcut to Smoother Recruitment?
When healthcare professionals compare job opportunities, 401(k) availability can be an immediate filter. Practices without retirement offerings don’t always make candidates’ shortlists.
Letting those positions sit vacant costs much more than advertising dollars. Every unfilled clinical position means reduced patient capacity and increased burden on your remaining team members. That hurts your practice’s operations, and it eats into your time when filtering through candidates. If you aren’t offering a compensation package that they really want, it’s a waste of everyone’s time.
When you include the 401(k) benefits healthcare employees want to see, it can help make the whole process smoother. Effective people management begins with attracting team members who view your practice as a long-term career destination.
Retention Can Be Easier When You Consider Employees’ Future
See if retirement benefits’ ROI kicks into high gear by looking at employee retention. Health and dental practices have high turnover and every time you have to replace a great worker, you start all over again with the recruitment process. That’s expensive, and it eats away at your team’s shared skills, too.
Build a comprehensive compensation package that encourages employees to stick around longer. It’s not just hypothetical. Gusto found that offering a 401(k) plan can save over $100,000 in reduced employee turnover costs. And, if you’re smart with your vesting schedules, you can incentivize loyalty by investing employee future 401k contributions.
Get a Leg Up on State-Mandated Retirement Plans
Federally, 401(k)s aren’t mandatory, but some states require retirement plans for their employees.1 For example, California requires you to enroll in the free state sponsored plan CalSavers, or a qualified alternative like a 401(k).2
It’s not just California. Colorado, Connecticut, Illinois, and some other states are implementing mandatory retirement as well. Since employment laws can change often, that list is probably only going to get longer. Offering a 401(k) can help you, as an employer, be more competitive rather than just offering the minimum state-mandated plan.
Calculating Retirement Benefits ROI
Now let’s figure out what the return on investment (ROI) for offering a retirement benefit can look like. This is not financial or tax advice; it’s just an illustration to show how a 401(k) plan can benefit your practice, not just your employees.
- Calculate the investment. Add up 401(k) costs which may include a monthly base fee, a fee per participant or eligible employee, and employer match costs, if applicable (this is generally a decision you can make when designing your plan).
- Consider recruitment costs. Think about how many employees you typically need to hire in a given year. How much does the talent acquisition process cost?
- Estimate retention improvement. The actual rate of retention varies wildly, but Gusto puts the figure around 30%.
- Factor in tax deductions. The IRS provides significant tax advantages for employers offering qualified retirement plans. In some states, setting up 401(k) programs keeps you ahead of compliance.
When you compare the costs to your savings, you may be surprised by the estimated return on your investment — not to mention a boost in employee satisfaction.
The Total Compensation Message
Retirement can be expensive (especially for dentists) but you can help your employees get a little bit closer to building a healthy nest egg. A 401(k) program can be a tool to help keep employees motivated.
- Don’t be shy when talking about your benefits package. Communicate your practice’s benefits before, during, and after the hiring process.
- Keep 401(k) details front and center in your employee handbook. If anyone has questions, they can find fast answers.
- Incorporate retirement benefits into performance management discussions, annual reviews, and compensation conversations. It’s part of the package, and treating it as such will emphasize its value.
Keep it Simple: Put Payroll and 401(k) Together
The retirement benefits ROI can go beyond simple cost-benefit calculations. Practices that invest in employees’ future 401(k) programs can aim to build cultures of mutual commitment where team members feel valued both now and in the future. Isn’t a stronger team that cares about your patients worth every penny?
You can see how the financial and team benefits compound, but you don’t have to handle this whole 401(k) thing on your own. When your 401(k) provider connects seamlessly with your integrated payroll system, employee contributions and employer matches are automated. The math is handled for you every pay period, every time. That can mean fewer mistakes from manual calculations, and less time spent on admin.
With a direct connection to Gusto 401(k), HR for Health can be a complete solution for practices just like yours. Yes, that includes payroll and retirement. Talk to us about how you can get the most out of your competitive benefits package or schedule a demo to see how uncomplicated HR can be.
Disclosures:
1 The information provided herein is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice; this summary was prepared from third-party sources as of February 2026. This information is considered to be reliable at the time of writing, may not necessarily be all-inclusive, is not guaranteed as to accuracy and is subject to change at any time without notice. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided. Deadlines, fees, and other program details are subject to change by the state without notice and should be checked prior to making any decisions. If you already offer a qualified employer-sponsored plan, exemptions may be required. Please consult with your state’s specific exemption information for more details.
2 The CalSavers mandated registration deadline with at least 1 employee (as reported to the EDD in the preceding calendar year), who are not otherwise exempt from participation, can register with CalSavers. The registration deadline for employers with 1-4 employees was December 31, 2025. Requirements to report your exemption apply. This summary was prepared from third-party sources as of February 2026. The information herein is considered to be reliable at the time of writing, may not necessarily be all-inclusive, is not guaranteed as to accuracy and is subject to change at any time without notice. The information provided herein is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. Investing involves risk and investments may lose value. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein. Deadlines, fees, and other program details are subject to change by the state without notice and should be checked prior to making any decisions and can be reviewed by visiting the State of California’s Franchise Tax Board. Visit the CalSavers site to learn more.
